To all my college grads - Say "Hello" to your student loans

It's been over 6 months since I have graduated and you know what that means - your 6 month grace period for your student loans is now over! Time to cough up the dough to myfedloan.org or SallieMae (if you were a college student in the US).

In my effort to wisely manage my funds, I have found Mint.com incredibly helpful in navigating all of my monetary accounts and viewing them all on an all-inclusive and somewhat visually appealing dashboard. Mint could take a lesson or two in financial website design from AMEX ... but that is my humble opinion.

While determining how to best pay off my student loans, I struggled to find an online calculator to sufficiently allocate my funds to the multiple loans that I have taken out over my 4 years at Cal. Each of my loans have varying interest rates and principal amounts and originally summed to just over $22k. Surprisingly, calling FedLoan was futile as their CSRs constantly told me to simply divide my total principal amount by the # of months I wished to pay off my loans. Even the marginally math savvy should realize that how you allocate your payments towards interest and principal can affect the duration of your repayment. 

After many disappointing phone calls, I opted to take this old-school to Excel and mathed out my loans and optimal repayment structure.

For those interested and also struggling to optimize your payment plan, here is the template I used to calculate my unique loan allocations. The orange cells are your "inputs" and the blue cells are your "outputs." Others are formulaic (CUMINT, CUMPMT, etc.). I put in my principal loan amounts and their respective interest rates as well as my ideal repayment duration. I cheated here a little bit and used Risk Solver to optimize my loans so I allocate the right amount to each loan to pay them off in a reasonable amount of time (given constraints...like monetary constraints hohoho....this girl is noooot made of money). In Risk Solver terms, I set a max monthly payment of $450 as a constraint and payment duration as my decision variables (along with the constraint of a maximum 4.5 year repayment term). My ultimate objective was to minimize the total amount of interest I would have to pay given the above decision and constraint variables.

Boom! It worked out and now my inner-Excel geek is incredibly happy.  

loan_payment_calculator.xlsx
File Size:	11 kb
File Type:	xlsx

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